Garantiförsäkring

Garantiförsäkring, often translated as guarantee insurance or surety bond, is a financial product that provides security to a beneficiary against a potential loss or failure of a contractual obligation by a third party. In essence, it acts as a guarantee that a specific performance or payment will be met.

The parties involved in a garantiförsäkring are typically the principal (the party making the promise or undertaking the obligation), the beneficiary (the party receiving the promise or benefit), and the guarantor (the insurance company issuing the guarantee). The principal pays a premium to the guarantor, who then assumes the risk of the principal defaulting on their obligation. If the principal fails to fulfill their end of the agreement, the beneficiary can claim compensation from the guarantor up to the insured amount.

Garantiförsäkringar are commonly used in various sectors, including construction, where they ensure project completion or payment to subcontractors, and in international trade, to guarantee payment or performance in cross-border transactions. They can also be found in situations requiring performance bonds, such as for public tenders, or in the form of rental guarantees to protect landlords. The purpose is to mitigate risk and build trust between parties who may not have a prior relationship.